Unilever faces potential strike action over pensions

Unilever’s plans to end the final salary pension scheme could meet further strike action from employees.

In December, over a third of Unilever’s 7,000 strong workforce went on strike over the company’s proposed plans to end its final salary pension scheme. The Unite, Usdaw and GMB unions, which represent Unilever workers across the UK, are to call further strike action in January.

Unilever employ approximately 7,000 workers and around 5,000 of them are on their final salary pension scheme. The company has announced plans to close the final salary scheme from July this year and move its workers on to a new career average scheme.

The company, whose products include Pot Noodle, Marmite and PG Tips, have indicated that they believe that the final salary pension scheme model is no longer appropriate. They argue that the changes are necessary in order to make pensions sustainable in the future.

Unilever argue that the new pension scheme will be very competitive and had been enhanced after consultation with it employees. They are concerned that the planned strike action was disproportionate to the changes.

However, the workers argue that the change to the pension scheme will cost them 40% of their retirement income. The Unions are also angry at the company for refusing to meet them and warn that the workers will not give up on their pensions after only one day of strike action.

A spokesperson from the GMB Unions said: “Unilever need to get the message that profitable companies will not be allowed to walk away from their savings commitments to their loyal workforce.”

A series of 24 hours strike looks set to start around 17th January. It could continue for 12-14 days and will follow some worker demonstrations.

The news comes as Shell also announce the closure of its final salary pension scheme from 2013. Any staff who are already members of the scheme will be able to continue contributing to it, but new employees will only be offered a defined contribution scheme.

Shell have indicated that the change reflected current trends in the market and that the new package will be designed to be strongly competitive.

However, the changes met fierce criticism from the Unions, particularly as Shell had recorded a surplus in 2010. The Unions argue that Shell did not need to close its final salary scheme and that the decision to do so simply ‘reflected corporate greed’.

A recent study by the Association of Consulting Actuaries revealed that out of the final salary pensions schemes that exist in the private sector in the UK, only 10% remain open to new members. Furthermore, 40% have now been closed to further contributions from existing members of the schemes. It is thought that Shell are the last of the UK’s top 100 publicly listed companies who have called an end to the final salary pension scheme.

Experts indicate that this leaves only 2 million private sector workers with a defined benefitpension scheme, and this figure will continue to fall.